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Detroit school system to split under Michigan governor's plan

(Reuters) - Michigan Governor Rick Snyder on Thursday proposed a dramatic restructuring of Detroit's public school system, which remains financially and academically troubled despite years of state oversight.

The governor's plan would split the district into two entities. The Detroit Public Schools, run by a state-appointed emergency manager, and its elected school board would continue to exist but only for the purpose of eliminating the district's $483 million operating deficit.

A new Detroit Education District, managed by a seven-member board initially appointed by the governor and Detroit's mayor, would take operating control of the schools. Another appointed commission would hire an education manager to run the school system.

"The schools will be a vital part of Detroit's continuing comeback, and this plan represents state and city leaders working together on a long-term solution," Snyder said in a statement.

While Detroit shed about $7 billion of its $18 billion of debt and obligations when it exited the biggest-ever U.S. municipal bankruptcy in December, the city's school district has been unable to shake off a state-declared financial emergency that dates back to 2008.

In anticipation of the Republican governor's announcement, the Detroit Federation of Teachers bussed members to the state capitol to protest. The ensuing teacher shortage forced the closure of 18 schools on Thursday.

The Detroit Public Schools has been struggling with falling enrollment, a high debt load that includes about $1.8 billion of outstanding bonds, and poor academic performance. Only a small percentage of high school students are proficient in math and science.

Snyder's plan, which requires legislative approval, would maintain $72 million in existing annual property taxes to allow Detroit Public Schools to eliminate the operating deficit over about seven years. Michigan, in turn, would send the new Detroit Education District up to $72 million in additional funding, depending on enrollment.

Michigan's Republican House Speaker, Kevin Cotter, said all options will be on the table to "truly change the direction of education" in Detroit. Guiding principles he released warned against raiding Michigan's school aid fund "to pay off legacy debt of any one district."

Snyder said his plan was not a Detroit Public Schools bailout, noting that the state guarantees payments on much of the school district's bonds.